Shares of Coca-Cola Enterprises were down 5.5 percent, or $1.14, at $19.45 in morning trading on the New York Stock Exchange.

Coca-Cola lowered its 2004 outlook to between $1.21 and $1.25 per share from a previous range of $1.48 to $1.52 per share, as the company expects North American volume to fall 1 percent and European volume to slide 3 percent for the period. Excluding a second-quarter charge, fiscal-year profit should be $1.26 to $1.30 per share.

Analysts surveyed by Thomson First Call see Coca-Cola's earnings at $1.39 per share on sales of $18.36 billion, compared with last year's income of $1.30 per share on revenue of $17.33 billion.

The company also said it anticipates third-quarter profit to range between 38 cents and 40 cents per share, with declines in both North American and European sales. Analysts expect income of 49 cents per share for the period, compared with 55 cents per share a year ago.

Coca-Cola said it will cut capital spending by $100 million to $1 billion to offset lagging operating performance.

"We are taking action to preserve our free cash flow through reductions in capital spending, close management of our working capital, and ongoing efforts to maximize efficiency as we work through these disappointing short-term results," said John R. Alm, president and chief executive officer. "As we look beyond the weather-related volume issues in Europe and the current soft retail environment in North America, we continue to see growth opportunities in all of our territories."

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